Factors of Tax Evasion

Abstract

Tax evasion is an issue of great economic and legal importance. Its high level of representation leads to a reduction in available public revenues and government capacity to adequately provide public services. Also, the implementation of tax evasion violates tax laws and endangers the constitutionally guaranteed right of government to collect taxes. This paper will analyze the factors that affect the level of tax evasion: economic, legal, and institutional, demographic, and cultural and behavioral. The goal of this paper is to determine the intensity of their influence so that tax policymakers, professionals, and academics can identify the most important factors and define valid measures to combat tax evasion. Although economic factors were expected to have a key impact, the role of non-economic factors turned out to be more critical.